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THE
MINISTRY OF CONSTRUCTION
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
07/2006/TT-BXD
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Hanoi,
November 10, 2006
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CIRCULAR
GUIDING THE
ADJUSTMENT OF COST ESTIMATES OF CONSTRUCTION WORKS
Pursuant to the Government's Decree No.
36/2003/ND-CP of April 4, 2003, defining the functions, tasks, powers and
organizational structure of the Ministry of Construction;
Pursuant to the Government's Decree No. 16/2005/ND-CP of February 7, 2006, on
the management of investment projects on construction of works, and Decree No.
112/2006/ND-CP of September 29, 2006, amending and supplementing a number of
articles of the Government's Decree No. 16/2005/ND-CP of February 7, 2005;
Pursuant to the Government's Decree No. 94/2006/ND-CP of September 7, 2006,
adjusting the common minimum wage;
The Ministry of Construction guides the adjustment of cost estimates of
construction works as from October 1, 2006, as follows:
I. GENERAL PROVISIONS
1. This Circular guides the adjustment of cost
estimates of state capital-funded construction works which are made on the
basis of the sets of unit costs promulgated by provincial/municipal People's
Committees in accordance with the State's current norms.
Investment projects on construction of works
which use other capital sources are encouraged to apply the regulations on
adjustment of cost estimates guided in this Circular.
2. Work construction cost estimates and
construction survey cost estimates made on the basis of capital construction
unit costs or construction survey unit costs applicable to provinces and
centrally run cities according to the wage scale in wage table A6, issued
together with the Government's Decree No. 26/CP of May 23, 1993, shall be
adjusted according to the minimum wage in each period as specified in the
Appendix to this Circular.
3. For works which are subject to separate unit
costs or of which machine shift costs are set by competent persons, their cost
estimates shall be adjusted according to the principles and methods guided in
this Circular.
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1. Work construction cost estimates and
construction survey cost estimates made on the basis of the sets of work
construction unit costs of provincial/municipal People's Committees, which are
calculated according to the minimum wage of VND 350,000/month and the wage
levels in wage table A.1.8, issued together with the Government's Decree No.
205/2004/ND-CP of December 14, 2004, shall be adjusted as follows:
1.1. Adjustment of construction cost estimates
1.1.1. Adjustment of labor cost
Labor cost in construction cost estimates made
on the basis of local construction unit costs shall be multiplied by the
adjustment coefficient (KDCNC) in accordance with the regime of adjustment of
the common minimum wage.
The adjustment coefficient (KDCNC) shall be
determined for each province or centrally run city or for works of which unit
costs are set on the basis of separate wage mechanisms, regimes and policies.
For labor cost in cost estimates determined on
the basis of unit costs set by localities according to the minimum wage of VND
350,000/ month, the adjustment coefficient (KDCNC) is the quotient of the
division of the new common minimum wage by the minimum wage already used in
calculating the unit costs (VND 350,000/month).
1.1.2. Adjustment of construction machine cost
Construction machine cost in construction cost
estimates made on the basis of local construction unit costs shall be
multiplied by the adjustment coefficient (KDCMTC) in accordance with the regime
of adjustment of the common minimum wage.
The construction machine cost-adjustment
coefficient (KDCMTC) shall be determined for each province or centrally run
city or for works which are subject to separate machine shift and construction
equipment costs.
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According to the above principle, the
construction machine cost-adjustment coefficient (KDCMTC) in construction cost
estimates applicable to provinces and centrally run cities is 1.05. For
provinces or centrally run cities with particular construction structures, this
coefficient shall be decided by provincial/municipal People's Committees but
must not exceed 1.05.
For works constructed in lines through many
provinces and centrally run cities for which separate machine shift costs have
been set, their investors shall calculate the adjustment coefficient and report
it to the branch-managing ministry for approval and application; other cases
shall be decided by investment deciders.
1.1.3. Cost items fixed in percentages (%) of
construction cost estimates
Cost items fixed in percentages (%) of
construction cost estimates include other direct costs, general cost,
pre-determined taxable income, value added tax, cost of building makeshift
houses at construction sites for dwelling and construction administration
according to current regulations.
1.2. Other cost items
Cost items such as cost of management of
investment projects on construction of works (Decision No. 10/2005/QD-BXD of
April 15, 2005, of the Construction Ministry), and cost of project formulation
and construction work design (Decision No. 11/2005/QD-BXD of April 15, 2005, of
the Construction Ministry) shall be calculated at percentage rates (%)
according to current regulations.
Particularly for construction survey cost
estimates, cost items shall be adjusted according to the above principles and
methods.
III. ORGANIZATION OF IMPLEMENTATION
1. For provinces and centrally run cities which
have made the sets of work construction, machine shift and construction
equipment unit costs on the basis of wage scales and tables and wage-based
allowances provided for by the Government's Decree No. 205/2004/ND-CP of
December 14, 2004, the adjustment of work construction cost estimates and the
transitional implementation guidance shall be decided by provincial-level
People's Committees for the adjustment of cost estimates of local construction
works funded with state capital.
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2. Concerned ministries and branches shall guide
the adjustment of cost estimates of investment projects on construction of
works under their management according to the guidance in this Circular.
3. Investors shall organize the adjustment, and
approve the results of adjustment, of work construction cost estimates and
total cost estimates according to current regulations.
4. The transitional calculation and adjustment
of work construction cost estimates shall be considered and decided by
competent persons, ensuring effectiveness and non-interruption of project
execution, specifically as follows:
4.1. For construction investment projects which
are being or have been formulated but have not yet been approved by authorities
competent to decide on investment, their total investment capital shall be
adjusted in accordance with the new minimum wage.
4.2. For construction works under construction
investment projects for which dossiers of design-total cost estimates or cost
estimates are being made, their construction cost estimates and other cost
items in their total cost estimates shall be adjusted according to the guidance
in this Circular.
4.3. For works or work items of which total cost
estimates or cost estimates have been approved by competent authorities but for
which bidding or contractor designation has not yet been or is being organized
or for which bidding results are available but contracts have not yet been
signed, their investors shall re-adjust their total cost estimates, cost
estimates or bid package prices in accordance with this Circular.
4.4. For incomplete works or work items, their
construction cost estimates shall be adjusted for the work volumes performed
since October 1, 2006, in accordance with this Circular.
For the construction volume performed since
October 1, 2006, if the involved parties agree in the contract not to adjust
prices through the course of performance, the investor and the construction
contractor may negotiate to supplement the contract in order to guarantee the
benefits of laborers according to regulations.
4.5. For construction works subject to separate
unit costs (work construction unit costs), the boards in charge of making unit
costs for the works shall, based on the regimes and policies allowed by the
State for application to the works and the principles for adjustment of work
construction cost estimates guided in this Circular, determine the levels of
adjustment of labor cost, construction machine cost and other costs (if any) in
work construction cost estimates.
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APPENDIX
(To
the Construction Ministrys Circular No. 07/2006/TT-BXD of November 10, 2006)
Work construction cost estimates
and construction survey cost estimates made on the basis of capital
construction unit costs or construction survey unit costs applicable to
provinces and centrally run cities according to the wage scale in wage table
A6, issued together with the Governments Decree No. 26/CP of May 23, 1993, are
adjusted as follows:
1. Adjustment of construction
cost estimates
1.1. Adjustment of labor cost
and construction machine cost:
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1.2. Cost items fixed in
percentages (%) of construction cost estimates
Other direct costs, general
cost, pre-determined taxable income, value added tax and cost of building
makeshift houses at construction sites for dwelling and construction
administration shall be calculated at percentage rates (%) according to current
regulations.
2. Adjustment of several other
cost items
2.1. Adjustment of construction
survey cost estimates:
Construction survey cost
estimates made on the basis of the above construction survey unit costs shall
be multiplied by the corresponding adjustment coefficient (KDCKS)
specified in Table 2 of this Appendix.
2.2. Adjustment of labor cost in
cost estimates of construction material and structure tests:
Labor cost in cost estimates of
construction material and structure tests determined on the basis of the cost
limits and unit costs of construction material and structure tests, issued
together with the Construction Ministers Decision No. 32/2001/QD-BXD of
December 20, 2001, shall be multiplied by the adjustment coefficient KDCTN
of 2.37.
2.3. Other costs fixed in
percentages (%) of total work construction cost estimates shall be determined
according to current state regulations.
Particularly, pre-tax cost
estimates of urban construction planning work, made on the basis of the
construction planning cost limits issued together with the Construction
Ministers Decision No. 06/2005/QD-BXD of February 3, 2005, shall be multiplied
by the adjustment coefficient of 1.15.
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Table
1: Adjustment coefficients of construction cost estimates
Adjustment
coefficients:
Local
capital construction unit cost calculated according to the monthly minimum
wage
VND
144,000
VND
180,000
VND
210,000
VND
290,000
Labor cost (KDCNC)
4.32
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2.95
2.14
Construction machine cost (KDCMTC)
1.55
1.50
1.45
1.35
Table
2: Adjustment coefficients of construction survey cost estimates
Adjustment coefficient (KDCKS)
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Construction survey unit cost
calculated according to the monthly minimum wage
VND
180,000
VND
210,000
VND
290,000
20%
1.89
1.71
1.40
40%
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1.76
1.44
60%
2.02
1.82
1.48